Monday, June 19, 2017

DOJ Switches Sides on Murphy Oil

DojOver at On Labor, Vivian Dong describes the switch:

[T]he Department of Justice announced last Friday that it will switch over its support in the upcoming Supreme Court case, NLRB v. Murphy Oil, from the National Labor Relations Board to Murphy Oil. The issue in the case, set for the 2017 October term, is whether arbitration agreements with individual employees that ban employees from pursuing employment claims on a class or collective basis (class action waivers) violate the NLRA. Under President Obama, the DOJ wrote an amicus brief in support of the NLRB, which had ruled that such arbitration agreements did indeed violate the NLRA. But, as the DOJ states in its re-filed brief, “after the change in administration, the office reconsidered the issue and has reached the opposite conclusion.” The DOJ now argues that “nothing in the NLRA’s legislative history indicates that Congress intended to bar enforcement of arbitration agreements like those at issue here.” NLRB v. Murphy Oil was consolidated with Epic Systems Corp. v. Lewis (the 7th Circuit opinion that caused the circuit split), and Ernst & Young LLP v. Morris—all three cases received significant attention when their opinions were issued. Whatever the outcome, the case will be a landmark case for employment law.

rb

June 19, 2017 in Arbitration | Permalink | Comments (0)

Saturday, June 17, 2017

Ware & Levinson on Arbitration Law

Arbitration lawCongratulations to Steve Ware (Kansas) and Ariana Levinson (Louisville) on the publication of their new book Principles of Arbitration Law (Concise Hornbook Series, available July 2017). Here's the publisher's description:

The Concise Hornbook Principles of Arbitration Law is an authoritative and extensively cited treatise on arbitration. It thoroughly discusses general arbitration law―from federal preemption of state law to the formation, performance, and enforcement of arbitration agreements―and provides in-depth coverage of specialized law governing international arbitration and labor arbitration. The last few decades have witnessed the growth of a large body of legal doctrine―from statutes, judicial decisions, and other sources―focused on arbitration. This Concise Hornbook summarizes that body of law, so should be useful to lawyers and scholars researching arbitration law and to students learning about arbitration.

I haven't yet received a copy of the book, but know from reviewing the draft of the labor law chapter that it will be top-flight.

rb

June 17, 2017 in Arbitration, Books, Labor Law, Scholarship | Permalink | Comments (0)

Friday, June 2, 2017

Gely Receives NAA Petersen Award

Gely-RafaelCongratulations to Rafael Gely (Missouri-Columbia),  who just received the David Petersen Award from the National Academy of Arbitrators.  In addition to all his labor/employment work, Rafael directs Missouri-Columbia's Center for the Study of Dispute Resolution.  He also is the founder of Workplace Prof Blog -- he created the blog and then handed it off to me way back when he was at Cincinnati. Here’s the announcement of the award, which is extremely well deserved:

The National Academy of Arbitrators conferred upon Rafael Gely the David Petersen Award at its annual meeting in Chicago, Illinois. The David Petersen Award recognizes and honors individuals who have given invaluable service to the Academy.

The Academy conferred the Petersen Award because of Professor Gely’s instrumental role in the startup and continual maintenance of arbitrationinfo.com, the neutral website which is a joint venture of the National Academy of Arbitrators and the University of Missouri School of Law.  Through Professor Gely’s work as an editor of the site, he has written content on a regular basis, designed and updated the site, supervised student assistants, and crucially connected with journals both before and after articles are written.  The Academy notes the creation of the website provided a source of information and education regarding arbitration for journalists, professionals, and the public. The Academy believes that the website has immeasurably improved the discourse and understanding of labor and employment arbitration in both United States and Canada.

rb

June 2, 2017 in Arbitration, Faculty News | Permalink | Comments (2)

Sunday, May 21, 2017

Michael Green: Sleepless in Fort Worth

GreenMichael Green has been burning the midnight scholarship oil recently. He has posted two articles to SSRN in the last month: The Audacity of Protecting Racist Speech under the National Labor Relations Act, forthcoming 2017 U. Chicago Legal Forum, and Can NFL Players Obtain Judicial Review of Arbitration Decisions on the Merits When a Typical Hourly Union Worker Cannot Obtain This Unusual Court Access?, forthcoming NYU J. Legislation and Public Policy. He also has a forthcoming paper in SMU Law Review on Racial Prejudice in ADR in the Workplace (SSRN post coming soon). Congrats, Michael!

rb

May 21, 2017 in Arbitration, Employment Discrimination, Labor Law, Scholarship | Permalink | Comments (0)

Sunday, February 12, 2017

New Book by ILO: Comparative Labor Dispute Resolution

IloAaron Halegua (NYU) writes to give us the heads-up on a free, downloadable book by the ILO: Resolving Individual Labour Disputes: A Comparative Overview. Here's the ILO's description of the book:

The number of individual disputes arising from day-to-day workers’ grievances or complaints continues to grow in many parts of the world. The chapters in this book cover individual labour dispute settlement systems in Australia, Canada, France, Germany, Japan, Spain, Sweden, the United Kingdom and the United States.

Each chapter examines and assesses the institutions and mechanisms for settlement of individual labour disputes, including the procedures and powers available, the interaction of these institutions and mechanisms with other labour market institutions (e.g. collective bargaining and labour inspection) and the broader system for resolution of legal disputes (e.g. courts of general jurisdiction, specialist commissions and tribunals).

And here's Aaron's description of the chapter he wrote on the U.S.:

I contributed a chapter on the United States, which I think provides a good overview of the role played by administrative agencies (USDOL, EEOC, NLRB, New York State DOL, NYS Division of Human Rights, etc.), federal and state courts, firm's internal efforts, and both labor and employment arbitration -- as well as how ADR is used in all those contexts. It also seeks to evaluate each one and pulls together statistics on the performance of each institution. I think that people already familiar with the United States might find the evaluation/statistics part and use of ADR in these institutions useful. I also think it would be particularly useful for people trying to understand our complex system with its web of overlapping institutions, or professors ... who might be teaching such students.

rb

February 12, 2017 in Arbitration, Book Club, International & Comparative L.E.L. | Permalink | Comments (0)

Thursday, November 3, 2016

Nolan & Bales Labor & Arbitration Nutshell

Bales BookDennis Nolan and Rick Bales have just published the new edition of their book, Labor and Employment Arbitration in a Nutshell (West, 3d ed.). The publisher's description:

Labor and employment arbitration law simplified. Authoritative coverage provides a description of the origin, development, and practice of labor and employment arbitration. Text focuses on the fundamentals of the labor and employment arbitration process and explores the major arbitration law issues, their importance, and the conflicting opinions on them.

A must have if your studying or working in this area.  

-JH

 

 

November 3, 2016 in Arbitration, Labor/Employment History, Scholarship | Permalink | Comments (0)

Wednesday, August 3, 2016

Companies Hoisted by Arbitral Petards in Consumer Cases

PetardA petard was a primitive bomb used to breach a wall. A bell-shaped iron casing would be filled with gunpowder and then affixed to the wall; a soldier would light the fuse, and the casing would direct the force of the blast toward the wall. Apparently, petards often exploded before the soldier could run away, hoisting (lifting) the soldier in the blast. Thus, the phrase "to hoist with his own petard" (Hamlet) means "to be harmed by one's plan to harm someone else".

That's an apt description for what seems to be happening now to many companies that have adopted consumer-arbitration clauses coupled with class-action waivers. A former student, now working at a large defense firm, describes how it's happening. Take a claim that's only marginally colorable and at face value worth only a few dollars, and file for arbitration. AAA rules impose on the company a $3400 arbitration fee plus attorneys fees. Settle for $3k. Repeat ad infinitum, thanks to the class-action bar contained in the company's arbitration clause. Company gets hoisted on its own petard.

Dennis Nolan and Marty Malin predicted several years back that something like this would happen, but this is the first report from the field I've heard. Dennis points out that companies may try work-arounds -- they might stop settling (which would force the hands of plaintiff mills, but wouldn't work on cases with claims that are low-dollar but at least colorably meritorious) or they might find an arbitral service provider cheaper than AAA (but courts might be reluctant to enforce arbitration clauses specifying arbitral service providers with close ties to the company -- see Hooters v. Phillips).

rb

August 3, 2016 in Arbitration | Permalink | Comments (1)

Monday, July 25, 2016

O'Brien on Whether Class-Action Waivers Violate the NLRA

O'brienChristine O'Brien (Boston College - Management) has just posted on SSRN her article (forthcoming 19 U. Pa. J. Bus. L. ___) Will the Supreme Court Agree with the NLRB that Pre-Dispute Employment Arbitration Provisions Containing Class and Collective Action Waivers in Both Judicial and Arbitral Forums Violate the National Labor Relations Act – Whether There is an Opt-Out or Not? Here's the abstract:

Should employers be able to require individual employees to sign away their rights to collective action as a condition of employment? The National Labor Relations Board has held in D.R. Horton and Murphy Oil USA that when employers require employees to waive their right to “joint, class, or collective claims addressing wages, hours, or other working conditions against the employer in any forum, arbitral or judicial” as a condition of employment, this violates the NLRA. Even allowing prospective employees to opt out of such class waivers does not cure the violation in the NLRB’s view according to its decision in On Assignment Staffing Services. A circuit split has developed on enforcement of the Board’s orders on the class waiver issue with the Fifth Circuit denying the NLRB enforcement, the Seventh affirming the Board, and the Eight Circuit joining the Fifth. There are several appellate cases pending before the Ninth Circuit which has yet to fully develop its stance and approximately sixty class waiver cases pending on appeal. The Supreme Court will likely be faced with deciding one of these appeals soon. This article discusses the NLRB’s and courts’ positions from several recent cases involving class waivers in individual employment dispute agreements. It suggests how the courts and the Supreme Court should rule as well as the possibility of legislative action.

rb

July 25, 2016 in Arbitration, Labor Law | Permalink | Comments (1)

Monday, May 30, 2016

Mandatory Class Procedure Waivers on the Ropes?

6a00d8341bfae553ef019b022183bb970b-200wiAdmittedly, this title is somewhat hyperbolic, but hope beats eternal and last week the Seventh Circuit created a circuit split on the Horton question, which I've addressed before on this blog and in a co-authored article with Tim Glynn.  And, full disclosure -- the two of us are among the signatories of an amicus brief before several courts of appeal.

Lewis v. Epic is well worth the read, but the Readers Digest version is that the court refused to enforce an agreement that precluded pursuit of class claims in either arbitration or court. The basis was the National Labor Relations Act's protection of workers' concerted actions for mutual aid and protection and its concomitant invalidation of agreements purporting to restrict that right. The prohibition of collective procedures in the arbitral tribunal "runs straight into the teeth of Section 7."

Nor did the FAA change that result. Epic argued that "even if the NLRA killed off the collective action waiver, the FAA resuscitates it," but the court didn't agree. Given that a court should try to reconcile potentially competing statutes, Epic faced a heavy burden in finding the FAA to trump the NLRB. Indeed, given the FAA's savings clause, which requires enforcing any contract "save upon such grounds as exist at law or in equity for the revocation of any contract," Judge Wood found no conflict at all between the two enactments.

Epic was circulated to the full Seventh Circuit, and no judge indicated a desire for en banc review. In normal circumstances, that would mean a petition for certiorari, but it seems unlikely than an understaffed Supreme Court will take the case. Presumably, the issue will continue to play out in the circuits that have not addressed the issue. In the meantime, however, the case has cast an epic uncertainty over waivers of collective or class relief in arbitration agreements.

CAS

May 30, 2016 in Arbitration | Permalink | Comments (0)

Tuesday, May 17, 2016

The FAA, the New York Convention, and "Effective Vindication"

ConventionStacie Strong (Missouri) just sent an email to the ADR listserv describing an international labor/arbitration case. I'm reprinting here (with permission) the description of the case from her email:

A very interesting case, Suazo v. NCL (Bahamas), Ltd., was recently handed down by the U.S. Court of Appeals for the Eleventh Circuit.  The case involved a cruise ship employee who was injured on the job and whose employment contract contained an arbitration agreement governed by the New York Convention and Chapter 2 of the Federal Arbitration Act.  The question was whether the employee could bar arbitration by showing that high costs may prevent him from effectively vindicating his federal statutory rights in the arbitral forum.

The matter came up as part of a motion to compel arbitration, and the court held that "Our New York Convention precedent suggests (but does not hold) that a party may only raise this type of public-policy defense in opposition to a motion to enforce an arbitral award after arbitration has taken place, and not in order to defeat a motion to compel arbitration."  This approach is, of course, problematic if one concludes that it will be difficult if not impossible to vindicate one's rights initially if one cannot afford to pursue the claim (here the court decided that the claimant had not made the appropriate showing, so the court was able to take a "no harm, no foul" perspective).  However, the decision appears correct under the New York Convention.

Some might say that the advent of third party funding and availability of contingent fee attorneys in the United States would allow worthy claimants to assert their claims, but there is no guarantee that a third party funder or contingent fee attorney will take any particular case.  While it is unclear how often this type of scenario will arise in the future, the case does identify a significant area of tension between domestic law and international law.

rb

May 17, 2016 in Arbitration | Permalink | Comments (0)

Saturday, May 14, 2016

Silicon Valley Arbitration Clauses

The NY Times today described the increasing use of arbitration clauses for Silicon Valley and other similar start-up firms.  This issue is nothing new to readers of this post, but it perhaps shows that even Silicon Valley isn't immune from broader workplace trends (although they certainly put a nicer spin on it).  As always, the devil is likely in the details.  Workers represented by experienced unions tend to fare well under arbitration systems, while individual employees--or those trying to form class actions--are far less likely to see the benefits of one-sided arbitration agreements.  As the article notes, the Consumer Financial Protection Bureau is seeking new rules for commercial arbitration, but aside from the NLRB, there seems little that agencies are doing for employees.

-Jeff Hirsch

May 14, 2016 in Arbitration, Labor and Employment News, Labor Law | Permalink | Comments (0)

Tuesday, April 26, 2016

Deflategate, Collective Bargaining, and Arbitration

DeflateLisa Gelernter (SUNY-Buffalo, and a Bills fan) writes to share her take on the Second Circuit’s decision upholding the four-game suspension of Tom Brady of the Patriots for the deflate-gate scandal. [Side note: all the NFL's footballs are manufactured right here in Ada, Ohio -- come visit the factory, and ONU Law School, some time!]

I've cut-and-pasted Lisa's comments here:

 

The [Second Circuit] overturned the district court’s vacatur of what the parties (including the union) all characterized as an arbitrator’s award.  The “arbitrator” in the case was NFL Commissioner Roger Goodell, who under the clear language of the collective bargaining agreement, was allowed to appoint himself as the hearing officer reviewing his decision to suspend Brady.

The Second Circuit’s opinion was totally consistent with the Supreme Court’s doctrine on the limited judicial review available for arbitration awards.  The twist in this case is that the arbitrator was not a neutral party – Goodell was reviewing his own decision.  The Second Circuit said that since the CBA specifically provided for this unusual review process, the court had to adhere to what the parties had agreed to.  Although that seems right in the collective bargaining context when both parties are on somewhat equal footing in terms of bargaining power, hopefully that reasoning will not be carried over into consumer and employment arbitrations where the individual consumer or employee may not realize that he or she is “agreeing” to a partial arbitrator.  After all, the Supreme Court has said that the reason that the FAA allows for enforcement of arbitration agreements is to allow for an alternative to litigation in court, which presumes some minimal level of procedural fairness and neutrality.

rb 

April 26, 2016 in Arbitration | Permalink | Comments (0)

Tuesday, April 5, 2016

St. Antoine Speaks at OSU

St. antoineI had the pleasure of seeing Ted St. Antoine (Michigan - emeritus and former dean) speak at today's Ohio State Journal on Dispute Resolution's Schwartz Lecture on Dispute Resolution. His topic was Labor and Employment Arbitration Today: A Midlife Crisis or a New Golden Age? OSU Dean Alan Michaels gave an eloquent and heartfelt introduction in which he aptly praised Ted for mentoring and nurturing several generations of labor scholars and practitioners (and, true to form, Ted spent much of his lecture praising the empirical work of Alex Colvin).

I still have a handwritten note Ted sent me, when I was still in practice, congratulating me on my first publication. Ted is a terrific role model, and it was a special pleasure to see him again today.

rb

April 5, 2016 in Arbitration, Faculty Presentations | Permalink | Comments (1)

Sunday, March 6, 2016

New ImageSince I tend to be foolishly optimistic, I've been wondering for a while (without actually putting in the effort to research the point) whether there's a silver lining to the current tendency to shuttle discrimination complaints to arbitration -- the possible inapplicability of statutory time limitations on bringing suits. Of course, Title VII doesn't have a traditional statute of limitations at all (i.e., a period measured from the accrual of the cause of action to the filing of a complaint in court), but rather has two separate temporal requirements that must be satisfied -- one (usually 300 days) for filing a charge with the EEOC and a second (90 days) for filing suit after receipt of a right to sue letter.

Under one paradigm (arbitrator subs in for the court to decide a case as a court would) the answer would be yes, but under another (arbitration is an alternative dispute resolution system subject to its own rules) the answer might be no. Plus, not only is the statutory language concerning pursuit of claims framed in terms of filing a "civil action" (which was not enough for the Court to find arbitration superseded) but arguably this whole structure is designed to filter disputes through a judicial process. That might mean that the procedural requirements are simply inapposite when arbitration is the dispute resolution procedure, which in turn might mean no statute of limitations at all for arbitration (the arbitrator could apply something like laches), and maybe no requirement at all of filing a charge with the EEOC.

Obviously, any movement along these lines would be employee-friendly, although it wouldn't address some of the serious problems of mandatory arbitration, including the typical clauses that foreclosing class claims in both court and arbitration.

The question came to mind in light of a case decided by the Second Circuit last August. The decision, Anthony v. Affiliated Computer Services,  is less than definitive both because it is nonprecedential and because it arose in the context of an attack on an arbitration award. The arbitrator had found the plaintiff's claim under various antidiscrimination statutes barred by his failure to file for arbitration within 90 days of receipt of the EEOC's right to sue letter, and the Second Circuit upheld the award as not exceeding the arbitrator's authority. Less than a ringing endorsement of the decision and suggestive of the possibility that the court might also have upheld an award based on exactly the opposite reasoning.

But Anthony does raise the issue of what the right answer should be for arbitrators who are faced with this question. 

Of course, silver linings in nature are transitory, and, even if arbitrators were to hold statutory procedures inapplicable in arbitration, employers are likely to add their own limitations periods to arbitration awards and, given the Supreme Court's sweeping readings of the FAA, those are likely to be upheld under current law.   

CAS

March 6, 2016 in Arbitration | Permalink | Comments (0)

Wednesday, February 24, 2016

Arbitration Info Site Launches

Arbitration-info-1
Rafaeol Gely (Missouri-Columbia) writes to announce the launch of ArbitrationInfo.com. Here's a description:

The Center for the Study of Dispute Resolution at the University of Missouri School of Law (CSDR) is delighted to announce the launching of ArbitrationInfo.com.  In 2014, faculty at the CSDR and the National Academy of Arbitrators (NAA) began conversations about a possible collaboration on a website that would provide information about labor arbitration. Leadership of the NAA, founded in 1947 as a nonprofit honorary and professional organization of arbitrators in the United States and Canada, was concerned about the manner in which labor arbitration and the arbitration process were being portrayed in the media. With the expansion of the use of arbitration outside the labor area, particularly in consumer and employment disputes, negative descriptions of the process in the media had reached an alarming level. While some of the criticism in these other areas was, and continues to be justified, the NAA feared that such criticism could have a delegitimizing effect with regard to labor arbitration.  Our initial conversations led us to believe that in part some of the press that arbitration was receiving was due to misunderstandings and misinformation about the different contexts in which arbitration was used and the various types of arbitration.

 The website addresses these concerns by providing the public, professionals and the media with a neutral, noncommercial and comprehensive source of information about arbitration. It includes an Arbitration 101 page, which serves as a primer on the arbitration process.  In addition, the site features a list of press contacts who are available to talk to members of the media about arbitration. The website is managed by an editorial board composed of members of the NAA and faculty at the CSDR. Students at the School of Law have the opportunity to develop content for and help maintain the website, in collaboration with distinguished members of the NAA.  Unlike other arbitration-related websites, ArbitrationInfo.com doesn’t generate or funnel business to a particular arbitrator or an arbitration practice group.

rb

February 24, 2016 in Arbitration | Permalink | Comments (1)

Saturday, February 20, 2016

Is Mandatory Arbitration Bad for Business?

Big fightA recent article in The Economist, The big fight, notes that European companies are far ahead of American companies in developing dispute esolution systems for consumer disputes, especially in online ADR. I think a good case can be made that SCOTUS's pro-arbitration line of cases -- especially those that all but extinguish consumer class actions -- have removed the incentive for American companies to invest in developing effective dispute-resolution programs. As a result, American companies risk falling yet farther behind their European competitors.

Here's some key language from the article in The Economist:

The more consumer-friendly stance [of European companies] did not just evolve in the courts but was to a large degree the result of a decision y the European Commission more than 20 years ago to make all small print subject to being examined and potentially overturned by the courts.... The most recent [directive] gives a shot in the arm to ADR, by for instance forcing businesses to inform consumers of their dispute-resolution options.... Firms won't be forced to sign up to an ADR scheme, but eh hope is that most will feel obliged to as the directive takes hold.

Europe also leads the way in developing online mechanisms for mediating the millions of cross-border e-commerce disputes that arise each year.

rb

February 20, 2016 in Arbitration | Permalink | Comments (0)

Monday, February 15, 2016

Class Actions, Arbitration, and D.R. Horton

HortonStacie Strong (Missouri) posted this to the ADR profs listserv. I am cross-posting it here with her permission:

As some of you may know, another case involving class waivers in the employment/labor context was heard Friday by the Seventh Circuit.  The case, Lewis v. Epic Systems, Inc. (No. 15-2997) (here's the district court opinion), saw the National Labor Relations Board (NLRB) filing an amicus brief.  While it is unclear how the Seventh Circuit will rule in this instance, it would seem that the Supreme Court will soon need to address this issue, either to resolve the split between agency (NLRB) determinations on the proper reading of the National Labor Relations Act and various federal court rulings (if the Seventh Circuit follows the approach used by other federal courts since the D.R. Horton case), or between different federal courts (if the Seventh Circuit adopts the NLRB approach).

rb

February 15, 2016 in Arbitration, Labor Law | Permalink | Comments (0)

Thursday, February 4, 2016

4th Circuit on an Extreme Arbitration Waiver-of-Rights Case

TomatoesLise Gelernter (SUNY-Buffalo) sends word of a recent Fourth Circuit consumer arbitration decision with important implications for employment arbitration and the waiver of substantive rights through arbitration generally. Apart from the second paragraph below, which I added, what follows in entirely Lise's analysis:

A recent Fourth Circuit consumer arbitration decision has an interesting discussion on arbitration agreement enforceability that has implications for the employment and labor arbitration arenas. Hayes v. Delbert Services, Docket No. 15-1170 (4th Cir. 2/2/16).

Western Sky was an online lender owned by Martin Webb. Webb was a member of the Cheyenne River Sioux Tribe, and Western Sky's offices were located on the Cheyenne River Indian Reservation in South Dakota. From its base on the Reservation, Western Sky issued payday loans to consumers across the country. Named Plaintiff James Hayes took a loan from Western Sky for about $2500 and an annual interest rate of 140% . Over the four-year life of Hayes's loan he would have paid more than $14,000. Western Sky all but conceded in the litigation that its loan practices violated a wide variety of federal and state laws.

 The loan agreements contained an arbitration clause that stated:

This Loan Agreement is subject solely to the exclusive laws and jurisdiction of the Cheyenne River Sioux Tribe, Cheyenne River Indian Reservation. By executing this Loan Agreement, you, the borrower, hereby acknowledge and consent to be bound to the terms of this Loan Agreement, consent to the sole subject matter and personal jurisdiction of the Cheyenne River Sioux Tribal Court, and that no other state or federal law or regulation shall apply to this Loan Agreement, its enforcement or interpretation.

(emphasis added). The loan agreement also stated: “Neither this Agreement nor Lender is subject to the laws of any state of the United States of America.”

The loan agreement’s arbitration agreement required the arbitration of any disputes related to the loan or its servicing and stated that the arbitration proceedings shall be “conducted by the Cheyenne River Sioux Tribal Nation by an authorized representative in accordance with its consumer dispute rules and the terms of this Agreement.”  The version of the agreement at issue in the case also provided that a party “shall have the right to select” the AAA or JAMS, or another group to “administer the arbitration.” The arbitration clauses also provided that the agreement

IS MADE PURSUANT TO A TRANSACTION INVOLVING THE INDIAN COMMERCE CLAUSE OF THE CONSTITUTION OF THE UNITED STATES OF AMERICA, AND SHALL BE GOVERNED BY THE LAW OF THE CHEYENNE RIVER SIOUX TRIBE. The arbitrator will apply the laws of the Cheyenne River Sioux Tribal Nation and the terms of this Agreement.

The agreement also prohibited the arbitrator from applying “any law other than the law of the Cheyenne River Sioux Tribe of Indians to this Agreement.”

After finding that Delbert was not a tribal entity, the Fourth Circuit ruled that the arbitration agreement was unenforceable because it “fails for the fundamental reason that it purports to renounce wholesale the application of any federal law to the plaintiffs’ federal claims.” The court recognized that the Supreme Court has found choice of law provisions and waivers of certain rights, such as class actions, to be enforceable, but distinguished the Delbert case because it violated the Supreme Court’s ruling that arbitration waivers that blocked “a party’s right to pursue statutory remedies” were not enforceable. The court stated: “a party may not underhandedly convert a choice of law clause into a choice of no law clause -- it may not flatly and categorically renounce the authority of the federal statutes to which it is and must remain subject.”

This appears to be a pretty extreme case of a waiver. In the employment and labor arena, the Fourth Circuit’s reasoning might have some play if there is an arbitration clause that appears to effectively waive all the rights of a party under an otherwise applicable law, such as Title VII or the FLSA. But the Fourth Circuit made it clear that it considers the Supreme Court’s decisions in ATT v. Concepcion and Italian Colors to limit that inquiry by embracing the enforceability of waivers of certain procedural or attendant rights, such as class actions, that merely make it more difficult or costly to pursue a federal remedy.

rb

February 4, 2016 in Arbitration | Permalink | Comments (0)

Wednesday, December 16, 2015

FAA Wins Again: DirectTV

Lise Gelernter of Buffalo sent out the following to the  National Academy of Arbitrators listserv. Although DirectTV is a consumer case, she thought it might be of interest to us employment types.

The Supreme Court just decided another consumer-related arbitration case (copy attached) -- DirecTV v. Imburgia.  In this case, the Court considered a class-action waiver in a 2007 contract that customers had with DirecTV in California.  The contract waived access to class action arbitration, EXCEPT " 'if the law of your state' does not permit agreements barring class arbitration, then the entire agreement to arbitrate becomes unenforceable." (Quoting from Justice Ginsburg's dissent).

The California Court of Appeal held that the "law of your state" language meant state law regardless of whether it was later preempted by the FAA (as it was in the Concepcion case). Since California law ruled out the banning of class arbitrations, the California court had held that the clause was unenforceable in California.

 The majority didn't buy it, in a 6-3 decision written by Justice Breyer.  Justice Thomas dissented on the basis that he does not believe that the FAA is applicable in state court.  Justice Ginsburg wrote another dissent, joined by Justice Sotomayor, in which she said the California court had correctly interpreted the clause and the meaning of the term "law of your state."

It's an interesting lineup -- in the Concepcion case, Scalia wrote the 5-4 decision, joined by Roberts, Alito, Kennedy and Thomas. Breyer wrote the dissent in Concepcion, joined by Sotomayor, Ginsburg and Kagan. In contrast, in the DirecTV case, Breyer wrote the majority 6-3 decision, joined by the same judges as in the Concepcion majority, except for Thomas, with the addition of Kagan.  It looks like Breyer and Kagan, although they dissented in Concepcion case, decided that parties had to adhere to  Concepcion as the law of the land.

In an interesting twist, DirecTV is now owned by AT&T, the company in the Concepcion case.

Keep in mind that class action arbitration is still a possibility in restricted circumstances, even under the recent Supreme Court apparent expansion of FAA preemption.  In Oxford Health Plans v. Sutter, 133 S. Ct 2064 (2013), the Supreme Court refused to vacate an arbitrator's decision that had construed ambiguous language in a contract to permit class action arbitrations. However, many corporations rewrote their arbitration clauses after Concepcion to be very unambiguous about prohibiting class arbitrations.

And I could add, from the employment side, that the NLRB's Horton rule is still being heavily litigated in the courts, although we have yet to see a circuit court decision upholding the principle that an agreement waiving all right to class relief violates the NLRA and Norris LaGuardia.


CAS 

December 16, 2015 in Arbitration | Permalink | Comments (0)

Saturday, October 31, 2015

Arbitration Class Action Waivers

Supreme CourtThis is old news for most readers of this blog, but it's nice to see a paper like the New York Times highlight the issue of arbitration waivers.  In particular, an article today talks about the Supreme Court's approval of arbitration class action waivers, including some backstory of the Italian Colors restaurant.

-JH

October 31, 2015 in Arbitration, Labor and Employment News | Permalink | Comments (1)